The financial statements at the end of the Network Realty, Inc.\'s first month o

Question

The financial statements at the end of the Network Realty, Inc.'s first month of operation are shown below.
By analyzing t he iterrelationships among the financial statements, fill in the proper amounts for (a) through (s). If your answer is zero, enter '0'.

Income Statement For the Month Ended December 31, 20Y4 s (a) Operating expenses: Utilities expense Interest expense... 1,800 3,960 67500 $ (c) NETWORK REALTY, INC. Retained Earnings Statement For the Month Ended December 31, 20Y4 s(d) Less dividends..._.... Retained earnings, Dece S(g) NETWORK REALTY, INC. Balance Sheet December 31, 20Y4 Assets 175,000 225,500 Total assets Liabilities 105,000 Stockholders' Equity s(0) Retained earnin Total liabilities and stockholders' equity . .. . .. . S (0) NETWORK REALTY, INC. Statement of Cash Flows For the Month Ended December 31, 20Y4 Cash flows from operating activities: Cash received from customers Deduct cash payments for expenses.... $125,000 67500 Net cash flows from operating activities . . .. Cash flows used in investing activities: . . .. Cash payment for purchase of land............ (175,000) Cash flows from financing activities: Cash received from sale of capital stock Cash received from issuing notes payable Deduct cash dividends $75,000 $ (o) 12,000 Net cash flows from financing activities................ S (q) S (s)

Explanation / Answer

Answer:

Income statement

For the month ended Dec-31-20y4

Fees Earned

125000

Less: elapses

wages Expanses

33120

Rent Expanses

18000

Utility Expanses

10620

Interest Expanses

1800

Miscellaneous Expanses

3960

Total Operating Expanses

67500

Net income

57500

Retained Earning

For the month ended Dec-31-20y4

Retained Earnings, Dec 31-Y4

0

Net income

57500

Less: Dividend

1200

Retained Earnings, Dec 31-Y4

56300

Balance sheet

Assets

Cash

50000

Land

175000

Total Assets

225000

Liability

Notes payable

Stock Holder's Equity

105000

Capital Stock

75000

Retained Earning

45500

Total Stock Holder's Equity

120500

Total Liability and Stock Holder's Equity

225500

Statement of cash flow

For the month ended Dec-31-20Y4

Cash flow from Operating activity

Cash received from Customer

125000

Deduct cash payment for expanses

67500

Net Cash flow from Operating activity

57500

Net Cash flow from Investing activity

Cash payment for purchase of land

-175000

Net Cash flow from Financing activity

Cash received from sale of capital stock

75000

Cash received from issuing Notes payable

105000

180000

Deduct: dividend Paid

-12000

Net Cash flow from Financing activity

168000

Net cash Increase/Decrees

50500

Dec 1-20Y4, cash Balance

0

Dec 31-20Y4, cash Balance

50500

working notes for the above answer is as under

a. $125,000 (net income for December of $57,500 plus total operating expenses of $67,500; also, the amount of cash received from customers on the statement of cash flows.)

b. $10,620 ($67,500 - $33,120 - $18,000 - $1,800 - $3,960)

c. $57,500 ($125,000 - $67,500); also, see the net income for December on the retained earnings statement.

d. $0 (There is no beginning retained earnings, since December was the first month of operation.)

e. $12,000 (See the cash dividends on the statement of cash flows.)

f. $45,500 ($57,500 - $12,000)

g. $45,500 ($0 + $45,500)

h. $50,500 ($225,500 - $175,000)

I. $75,000 (See the cash received from capital stock on the statement of cash flows.)

j. $45,500 [the same as (g)].

k. $120,500 ($75,000 + $45,500) or (i + j)

l. $225,500 ($105,000 + $120,500); also the same as total assets.

m. $57,500 ($125,000 - $67,500)

n. $105,000 (See notes payable on the balance sheet.)

o. $180,000 ($75,000 + $105,000)

p. $168,000 ($180,000 - $12,000)

q. $50,500 ($57,500 - $175,000 + $168,000)

r. $0 (December was the first month of operation.)

s. $50,500 [the same as (h)].

Income statement

For the month ended Dec-31-20y4

Fees Earned

125000

Less: elapses

wages Expanses

33120

Rent Expanses

18000

Utility Expanses

10620

Interest Expanses

1800

Miscellaneous Expanses

3960

Total Operating Expanses

67500

Net income

57500

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